Progressive Capitalism by David Sainsbury: A new centre ground is being forged

This book is equally important for what it says and for who is saying it. A decade ago, this prospectus would have seen its author branded “Red Sainsbury”. Now it is sensible and mainstream.

Progressive Capitalism: How to Achieve Economic Growth, Liberty and Social Justice
David Sainsbury
Biteback, 256pp, £20

This book is equally important for what it says and for who is saying it. The argument that growth, liberty and social justice require a fundamental reform of capitalism is rapidly moving from the left to the mainstream; and nothing symbolises this more than that David Sainsbury, the epitome of the progressive mainstream since his days in the vanguard of David Owen’s SDP in the 1980s, should be making it.

It is a powerful and cogent critique. Sainsbury was an effective science minister under Tony Blair who greatly increased state support for science. However, he writes: “It was only after I left government . . . that I began to question fundamentally the neoliberal political economy which had dominated governments in the western world for the last 35 years.”

Partly this was because of the 2008 crash and a growing conviction that competitiveness required a “race to the top” – not neo - liberalism’s “race to the bottom” – with state support for employment, innovation and skills. But there was also a telling personal dimension: the private equity takeover bid for his family firm, Sainsbury’s, in the summer of 2007. “There was not the slightest pretence of trying to improve the performance of the company,” he claims. The bidders proposed “to sell off all the properties and replace them with massive debts. Then they would put the company back on the market . . . and walk away with £1bn of profit.” The City was wildly keen, salivating at the £100m in fees the investment banks stood to earn: “a perfect example of wealth appropriation as opposed to wealth creation”.

The policy prospectus set out in the second half of the book is a must-read for anyone seeking to make sense of that new catchphrase “active industrial policy”. Sainsbury recommends far-reaching reform of equity markets to foster the creation and expansion of companies rather than their destruction and foreign takeover; a “national system of innovation” with the state as a key player; and a revolution in technical and vocational education that emulates German strength in these areas, although he warns against copying Germany glibly.

On equity markets, he favours a big cut in the fees paid to investment managers and a new “Shareholders’ Advisory Board” to promote “an understanding of the fundamental value of the companies in which [the City] invest[s]” rather than their short-term trading value. Investment managers should also get far more involved in the governance of the companies they own, including the appointment of directors and holding them to account, and constrain the boardroom pay explosion which shows little sign of abating. A wildly overpaid City breeds a wildly overpaid corporate sector.

Sainsbury is especially bold on takeovers. He proposes higher “hurdles” in shareholder support required from within the target company, and restrictions on those who can vote to those who have held shares in the target company for “a certain number of years”. This goes way beyond the 2012 Kay review of equity markets and long-term decision-making.

On innovation, Sainsbury supports the coalition’s establishment of Catapult Centres – national technology and innovation hubs in key industrial sectors, starting with highvalue manufacturing – but he favours more support for new technologies. Government departments should have “embedded R&D units” to promote technology and innovation on a strategic long-term basis; and regional development agencies – abolished by the coalition in 2010 – should be restored “in parts of the country which need them”.

A dramatic increase in the supply of technicians, especially with engineering skills, is Sainsbury’s goal for a revamped education and training system. Kenneth Baker’s new breed of university technical colleges for 14- to-19-year-olds should be expanded and local industry integrated in the management of further education. Some would go further and seek to introduce an English equivalent of Germany’s “dual system”, whereby employers and local authorities take joint responsibility for a system of mass apprenticeships with highquality vocational training alongside. But Sainsbury does not think this feasible because of the weakness of Britain’s chambers of commerce, trade associations and trade unions in comparison with Germany.

Sainsbury would pioneer reform through an “enabling state”, rather than through a return to “command and control”. But an enabling state is not a smaller state. “A first task of progressive politicians is to persuade people of the importance of competent and active government, standing above sectional interests,” he writes. This, conceptually, is a return to mainstream social democracy after its partial abandonment in recent decades. It cannot be achieved without a transformation in the capabilities of government, including a new national economic council and a much more purposeful civil service.

Sainsbury also puts in a heartfelt personal plea, from a public-spirited party donor caught up in party funding controversies, for state funding of parties so that governments of both parties are better able “to stand up to the financial power of interest groups”, be they trade unions or investment managers and bankers.

A decade ago, this prospectus would have seen its author branded “Red Sainsbury”. Now it is pretty sensible and mainstream. A new centre ground is being forged.

Andrew Adonis is the author of “5 Days in May: the Coalition and Beyond” (Biteback, £12.99)

The argument that growth, liberty and social justice require a fundamental reform of capitalism is rapidly moving from the left to the mainstream. Photograph: Getty Images.

This article first appeared in the 20 May 2013 issue of the New Statesman, The Dream Ticket

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Would the BBC's Nazi drama SS-GB have felt half so resonant a year ago?

This alternate history is freighted with meaning now we're facing the wurst-case scenario. 

Would SS-GB have felt half so resonant a year ago? Though the clever-after-the-fact Nostradamus types out there might disagree, I can’t believe that it would. When it comes to the Second World War, after all, the present has helpfully stepped in where memory is just beginning to leave off. The EU, in the process of fragmenting, is now more than ever powerless to act in the matter of rogue states, even among its own membership. In case you hadn’t noticed, Hungary, for instance, is already operating as a kind of proto-fascist state, led by Viktor Orbán, a man whom Jean-Claude Juncker, the president of the European Commission, jokingly likes to call “the dictator” – and where it goes, doubtless others will soon follow.

The series (Sundays, 9pm), adapted from Len Deighton’s novel, is set in 1941 in a Britain under Nazi occupation; Winston Churchill has been executed and the resistance is struggling to hold on to its last strongholds in the countryside. Sam Riley plays Douglas Archer, a detective at Scotland Yard, now under the control of the SS, and a character who appears in almost every scene. Riley has, for an actor, a somewhat unexpressive face, beautiful but unreadable. Here, however, his downturned mouth and impassive cheekbones are perfect: Archer, after all, operates (by which I mean, barely operates) in a world in which no one wants to give their true feelings away, whether to their landlady, their lover, or their boss, newly arrived from Himmler’s office and as Protestant as all hell (he hasn’t used the word “degenerate” yet, but he will, he will).

Archer is, of course, an ambiguous figure, neither (at present) a member of the resistance nor (we gather) a fully committed collaborator. He is – or so he tells himself – merely doing his job, biding his time until those braver or more foolhardy do something to restore the old order. Widowed, he has a small boy to bring up. Yet how long he can inhabit this dubious middle ground remains to be seen. Oskar Huth (Lars Eidinger), the new boss, is keen to finish off the resistance; the resistance, in turn, is determined to persuade Archer to join its cause.

It’s hard to find fault with the series; for the next month, I am going to look forward to Sunday nights mightily. I would, I suppose, have hoped for a slightly more charismatic actress than Kate Bosworth to play Barbara Barga, the American journalist who may or may not be involved with the British resistance. But everything else seems pretty perfect to me. London looks suitably dirty and its inhabitants’ meals suitably exiguous. Happiness is an extra egg for tea, smoking is practically a profession, and
the likes of Archer wear thick, white vests.

Swastikas adorn everything from the Palace of Westminster to Trafalgar Square, Buckingham Palace is half ruined, a memorial to what the Germans regard as Churchill’s folly, and the CGI is good enough for the sight of all these things to induce your heart to ache briefly. Nazi brutality is depicted here as almost quotidian – and doubtless it once was to some. Huth’s determination to have four new telephone lines installed in his office within the hour is at one end of this horrible ordinariness. At the other is the box in which Archer’s mutinous secretary Sylvia (Maeve Dermody) furiously stubs out her fag, full to the brim with yellow stars.

When I first heard about The Kettering Incident (Tuesdays, 12.20am; repeated Wednesdays, 10pm) I thought someone must have found out about that thing that happened one time I was driving north on the M1 with a more-than-usually terrible hangover. Turns out it’s a new Australian drama, which comes to us on Sky Atlantic. Anna (Elizabeth Debicki), a doctor working in London, pitches up back in Tasmania many years after her teenage friend Gillian disappeared into its Kettering forest, having seen a load of mysterious bright lights. Was Gillian abducted by aliens or was she, as some local people believe, murdered by Anna? To be honest, she could be working as a roadie for Kylie, for all I care. This ponderous, derivative show is what happens when a writer sacrifices character on the altar of plot. The more the plot thickens, the more jaw-achingly tedious it becomes.

Rachel Cooke trained as a reporter on The Sunday Times. She is now a writer at The Observer. In the 2006 British Press Awards, she was named Interviewer of the Year.

This article first appeared in the 24 February 2017 issue of the New Statesman, The world after Brexit